Budget Update

Current as of July 10, 2009

Dear Colleagues:

As you may have noted in some media reports today, South Carolina’s state revenue collections continue to decline. For instance, Comptroller Richard Eckstrom indicates that general fund revenues for June were down 10 percent, or $71.7 million lower than revenues for June 2008. General fund revenues were down 12.5 percent, or $828 million, for the last 12 months, while individual income tax revenue in June was down 10.1 percent, or $36.8 million, compared with revenues for the previous June, and off 15.4 percent, or $512.6 million, for the year. Sales tax revenue in June dropped 6.7 percent, or $13.8 million, compared with June 2008 sales taxes, and was off 8.5 percent, or $190.5 million, for the year.

The Rockefeller Institute of Government, which tracks state revenue and budget issues, has reported that South Carolina's 38.6 percent drop in personal income tax was second highest in the most recent four-month period, with only Arizona reporting a higher percentage, a 54.9 percent decline.

This news isn’t surprising, given that the state’s unemployment rate continues to climb, and it affirms our earlier guidance that further reductions to state appropriations are not just possible in the new fiscal year, but likely.

While no specific action is called for at present, please know that Winthrop continues to monitor this situation closely through a variety of resources, and we are managing our resources accordingly. We will keep you informed of other developments as warranted throughout the summer, as well as updating everyone in summary fashion when we re-assemble as a community in August.